US OPEN: Wall Street opens lower after hawkish CPI data

• Wall Street opens lower after hot CPI report
• US30 drops below lower limit of short-term range
• Delta Air Lines gains after Q1 earnings releases

Wall Street indices launched today's trading lower following a hot US CPI report for March. S&P 500 dropped 1.1% at session launch, Dow Jones moved 0.6% lower, Nasdaq declined 1.2% and small-cap Russell 2000 plunged almost 3%.

Headline CPI accelerated more than expected, while core CPI unexpectedly stayed unchanged at 3.8% YoY. This was also the third consecutive month of 0.4% monthly increases in headline and core CPI. Such a hawkish reading triggered spike on USD market as well as declines on equities and precious metals. FOMC minutes will be released this evening at 7:00 pm BST, but impact of this event on the markets may not be as dramatic as the impact of CPI release.

Source: xStation5

Dow Jones futures (US30) slumped following release of US CPI data for March earlier today. Taking a look at US30 chart at H1 interval, we can see that the index slumped from the vicinity of the upper limit of the short-term 38,900-39,350 pts trading range and plunged below the lower limit. As a result, US30 reached the lowest level in almost a month. Should bears remain in control, the next support level to watch can be found in the 38,550 pts area. A textbook target of the downside breakout from the aforementioned trading range suggests a possibility of a move to as low as 38,450 pts.

Company News

Delta Air Lines (DAL.US) gains after reporting Q1 2024 earnings report today before opening of the Wall Street session. Company reported adjusted revenue at $12.56 billion (exp. $12.5 billion), driven by 6.9% YoY jump in passenger revenue to $11.13 billion (exp. $11.0 billion). Passenger load factor increased from 81% a year ago to 83% (exp. 81.6%). Adjusted net income increased 77% YoY to $288 million (exp. $234.6 million). Adjusted EPS improved from $0.25 a year ago to $0.45 now (exp. $0.36). Delta Air Lines said that strong demand for travel continues in the second quarter and that it expects Q2 total revenue to be 5-7% YoY higher. Q2 adjusted EPS is seen at $2.20-2.50 (exp. $2.23). Company still expects full-year 2025 adjusted EPS to be $6.00-7.00.

US-listed shares of TSMC (TSM.US) are trading higher today after company reported sales data for March. Taiwanese company reported a 34% YoY increase in March sales, to 195.21 billion New Taiwan dollar (NT$). Sales in March were 7.5% higher than in February. Sales in the January-March 2024 period reached NT$592.64 billion and were 16.5% YoY higher than in Q1 2023. Back in January, TSMC projected Q1 sales of around $18.0-18.8 billion (NT$578-604 billion).

Analysts' actions

• Coterra Energy (CTRA.US) rated 'overweight' at Barclays. Price target set at $36.00
• Range Resources (RRC.US) rated 'underweight' at Barclays. Price target set at $35.00
• Monday.com (MNDY.US) downgraded to 'neutral' at Citi. Price target set at $250.00

Delta Air Lines (DAL.US) launched today's trading higher, following release of an upbeat Q1 earnings report. Stock is making another attempt at breaking above the mid-term resistance zone in the $48.50 area. An attempt to break above this zone at the beginning of this month turned out a failure, but given how short-lived was a subsequent pullback, uptrend does not seem to be in danger. Source: xStation5